Katelyn Washington
New Jersey state tax: Overview
New Jersey residents know they can pay some high taxes. Everything from gas tax to property taxes are among the highest in the states. Garden State heirs may also pay a death tax.
However, there is some good news: New Jersey's state sales tax isn't so high compared to sales taxes in other states. After all, several products in the state are exempt from tax, and New Jersey's sales tax rate is reduced in some areas.
Plus, you may qualify for a New Jersey property tax relief program to help you with your high homeowner taxes.
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Here's more of what you need to know about the Garden State's tax disposition.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
New Jersey income tax
New Jersey Income Tax Range: Single filers
Up to $20,000 | 1.4% |
$20,001 to $35,000 | 1.75% |
$35,001 to $40,000 | 3.5% |
$40,001 to $75,000 | 5.525% |
$75,001 to $500,000 | 6.37% |
$500,001 to $1 million | 8.97% |
More than $1 million | 10.75% |
New Jersey Income Tax Range: Joint filers
Up to $20,000 | 1.4% |
$20,001 to $50,000 | 1.75% |
$50,001 to $70,000 | 2.45% |
$70,001 to $80,000 | 3.5% |
$80,001 to $150,000 | 5.525% |
$151,000 to $500,000 | 6.37% |
$500,001 to $1 million | 8.97% |
More than $1 million | 10.75% |
New Jersey tax on retirement income: New Jersey doesn't tax Social Security retirement benefits, Military pensions, or Railroad Retirement benefits.
Taxpayers 62 and older (or those who have a disability) may exclude all or part of their retirement income from state taxation. To qualify for the exclusion, taxpayers cannot have an income above $150,000.
New Jersey sales tax
New Jersey imposes a 6.625% state sales tax. Localities can add an additional 3.313%.
However, the average local and combined sales tax rate is only 6.601%, according to the Tax Foundation. That's because the sales tax rate is reduced to 3.3125% in New Jersey's Urban Enterprise Zones.
- Groceries are tax-exempt.
- Prescription drugs are tax-exempt.
- Diapers are tax-exempt.
- Women's menstrual products are tax-exempt.
How much are property taxes in New Jersey?
In New Jersey, the average effective property tax rate is 2.08%, which is one of the highest in the nation.
New Jersey Property Tax Breaks
Eligible New Jersey residents who owned or rented their home during the tax year may qualify for ANCHOR property tax relief. Last year's payments were up to $1,750 each.
Additionally, qualifying New Jersey homeowners may also receive a property tax freeze. To qualify, residents must have lived in their current home since at least 2020, among other requirements.
These two New Jersey property tax relief payments are in addition to Stay NJ, a new property tax relief program set to make payouts in early 2026. Learn more on the state's Division of Taxation website.
New Jersey gas tax
Gasoline: $0.449 per gallon (effective January 2025)
Diesel: $0.519 per gallon (effective January 2025)
New Jersey taxes on alcohol and tobacco
Cigarettes | $2.70 per pack |
Other tobacco products | 30% of wholesale price |
Beer | $0.12 per gallon |
Wine | $0.875 per gallon |
Liquor | $5.50 per gallon |
New Jersey estate and inheritance taxes
There is no longer an estate tax in New Jersey, but that doesn't mean residents are off the hook for paying death taxes.
The state has an inheritance tax of between 11% and 16%. However, the heirs below won't need to pay a thing.
- Spouses
- Children
- Grandchildren and great-grandchildren
- Parents and grandparents
- Civil union partners
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